. . . that the same item may have many different appraised values depending on how you intend to use the appraisal? For instance, the value of an item for insurance coverage may be very different than its value for resale, or charitable contribution. Qualified appraisers understand the many different types of values, assigned uses, and market levels.
What is an Appraisal?
An appraisal is an unbiased independent objective opinion of value (worth) of an object by a qualified professional appraiser based upon observable data relative to the appropriate market(s), value approach, valuation date, and other factors.
Do You Need an Appraisal?y
An appraisal is a key element in protecting your interests, often serving as the cornerstone in a financial transaction.
Written appraisals are important legal documents which accurately describe an object and establish its value for a variety of purposes. These may include:
Insurance: To determine the appropriate replacement value, most commonly at retail, of an object in order to correctly provide for insurance coverage.
Loss and/or Damage Claims: To determine the value of an object lost or damaged and/or the amount, if any, of any loss in value as a result of the damage. Utilized to aid or facilitate claims settlements.
Property Division: To determine the Fair Market Value of an object in order to assist in the equitable distribution of property that is jointly owned by individuals, business associates, or corporations that may be changing ownership.
Charitable Donations: To determine the Fair Market Value of an object given to an accepting organization or institution in order to aid in establishing the donor's income tax deduction.
Informational and/or Market Related: To determine the Value of an object in anticipation of potential sale, or to determine the Value of an object under consideration for purchase, or to determine the Value of an object simply to know what it is worth within a specified market, or to determine specific information about an object such as maker, artist, age, country of origin, condition, or previous repair.
Estates: To determine the Fair Market Value of an object in connection with the preparation of estate tax returns, or to assist in estate planning, and/or to aid in the distribution of assets.
Financial: To determine the Fair Market Value of an object for asset management, loan collateral and related financial and legal matters.
Whats in an Appraisal?
Properly prepared appraisals are individual written reports and are not simple lists of property with numbers attached. The specific content and format of each appraisal report varies according to the individual function and purpose of the appraisal, but each appraisal should contain the following information:
Name and Address of Client
Purpose of the Appraisal Intended use: Insurance, Donation, Estate, Equitable Distribution, Etc.
Type of Valuation Used Replacement Value, Fair Market Value, Marketable Cash Value, etc. and Definition.
Valuation Approach Used Cost Estimate Approach, Income Approach, Market Data Comparison Approach, etc
Market in which valuation is applied: most common market (place).
Market Analysis Generic market History and possible projections for future activity.
How objects were acquired - especially for IRS purposes.
Statement of Professional Qualifications of Appraisers. Curriculum Vitae.
Date of Preparation of Appraisal and date on which objects were viewed, and effective date of Appraisal.
Statement of physical inspection/examination or method used in determining value.
Statement of "disinterest" on the part of the Appraiser.
Statement that the Appraiser has not been "disqualified" by the IRS (for IRS Appraisals).
Statement of Assumptions and Limiting Conditions.
Statement of Fee Structure, and that the Appraisers fee is not contingent on the appraised value of the object(s).
Statement of belief in authenticity - that the appraised object(s) correspond to description(s) listed in the Appraisal.
Thorough description of appraised objects. Measurements and weights when applicable.
Brief biography of the artist when necessary.
Provenance (if available).
Exhibition and Publication History (if any).
Statement of condition of appraised object(s).
Comparables and related analysis when necessary.
Statement of Value - not estimates, except when followed by detailed explanation.
Clear division of appraisal when one or more than one appraiser is involved. Who did what? Inclusion of Curriculum Vitae of consulting appraiser.
Signature of Appraiser(s) and Tax ID number(s) when appraisal is prepared for IRS purposes.
Statement of number of pages in appraisal.
Statement that the appraiser adheres to a professional code of ethics, and that the report is written to a professional standard such as USPAP* or that it complies with IRS requirements.
*USPAP is abbreviated for the Uniform Standards of Professional Appraisal Practice as established by the Appraisal Foundation.
Choose a qualified appraiser who has been professionally trained and tested by a recognized appraisal association, has experience and education in the field of the object to be appraised and knowledgeable in the legal, financial, and technical requirements of the appraisal. Personal property appraisers are not licensed and anyone may call himself an appraiser no matter what his qualifications or lack of them. It is therefore crucial to enlist the services of a qualified appraiser.
Our practice is limited to appraisals of Fine Art, Decorative Arts, Antiques, select Collectibles, and Historical material. For collections involving property in other fields or disciplines we work together with colleagues known to us who have equivalent expertise in their areas. We are pleased to recommend reliable appraisers for projects outside of our field, but in all cases encourage clients to seek appraisers who are members of one of the non-profit appraisal organizations that test, accredit/certify members and who require adherence to strict ethical standards.